Welcome to one of the Scrabble “bunus” rounds of the Blogging from A to Z Challenge! Yes, some of the letters are worth more points, because they’re Quite harder to play. And there aren’t any cities in the entire Bay Area that start with the letter Q, so we’re going to have to come up with another Quality. And we’ll have the same Quixotic Quest again when we deal with X and Z!

So, are there any other place names we can use? Neighborhoods, local landmarks, that sort of thing?  San Francisco has 118 distinct neighborhoods, and not one starts with the “Scrabble Challenge Trio.”  Ditto for the 33 hoods in San Jose.  (Which raises a Question: why does San Jose, with more geography and more people, have much fewer place names?)

Fortunately, we are about to be Quietly rescued by Redfin, who helpfully has their very own Quirky neighborhood names!

Update 10:16 AM: See added picture and graf toward the end. Quite Quintessential.

2705 NORBERT Ct
San Jose, CA 95148
$740,000

4 Beds
2 Baths
1,713 Sq. Ft.
$432 / Sq. Ft.
Built: 1978
Lot Size: 7,980 Sq. Ft.
On Redfin: 3 days
Property Type: Detached Single Family
View: Mountains, Neighborhood, Valley, City Lights
County: Santa Clara
Stories: 1
Community: Evergreen
MLS#: 81312097

AMAZING EVERGREEN HOME–ONE HOUSE AWAY FROM GROESBECK HILL PARK! BRIGHT VAULTED ENTRY, GOURMET KITCHEN WITH STAINLESS STEEL APPLIANCES, GRANTITE COUNTERTOP, SEPERATE DINING RM W/ GRANITE WET BAR, TILE IN KITCHEN AND HARDWOOD FLOOR IN HALLWAY, BAY WINDOW IN LIVING RM, CEILING FANS IN MOST ROOMS, FLAGSTONE PATIO WITH SPORTS COURT, FRUIT TREES, CUSTOM-BUILT VIEWING DECK IN BACKYARD! RENTS $3,100/MO

Upcoming Open Houses

Saturday, Apr 20: 2:00-4:00 pm

Now while this home isn’t the sine Qua non of Questionable real estate, it has certain Qualifications for the front page. Head off to the comments with your Questions and Quell any doubts that we would come up with some Quip.  Or Quirk.

Update 10:16 AM: Or in the case of this Quality structure on the left, we’re wondering how it will fare during the next Quake.

We could share even more pictures. Or we could always Quit.

Answer: The RBA is being bought up by foreigners with suitcases full of cash going to individual sellers.  Not the Real Bay Area is being bought up by investors with envelopes full of cashiers checks going to banks.

Report: Investors buy nearly half of Oakland’s foreclosed homes

Real estate firms turning properties into rentals, becoming "massive landlords" in some neighborhoods, critics say

by Aaron Glantz, Bay Citizen — June 28, 2012, 11:01 a.m.

The rental listing advertises a “gorgeous remodeled craftsman-style house” with three bedrooms, two bathrooms, a converted basement, a large deck and a backyard for $2,595 a month.

Eight months ago, this West Oakland home was owned and occupied by Theodros Shawl, a local chiropractor. Shawl bought the house in 2004, his first since emigrating from Ethiopia in 1990. Over the years, Shawl said, he rebuilt the home’s foundation and replaced its aging plumbing and electrical systems.

“I liked the fact that it was an older home, that I could repair and paint and fix there on the weekends. I was always at Home Depot,” said Shawl, 40. “I was living the American Dream.”

Last October, after being sidelined with a wrist injury, Shawl lost his home to foreclosure; in May, Bank of America sold it to a real estate investment firm, REO Homes 2 LLC, a company founded in 2010 by Bay Area businessman Neill Sullivan.

Lest you think this is a trend only in the depressed parts of the Bay Area, we assure you that it isn’t.  Real Estate Investment Trusts are back, mostly because there doesn’t seem to be a lot of places to get reasonable returns these days.  A recent article in The New Republic covers the growing national trend of paying cash for foreclosures and turning them into rentals.  Needless to say, actual would-be buyers are finding themselves aced out of the bottom-feeding.

Your New Landlord Works on Wall Street

Hedge funds are snatching up rental homes at an alarming rate

BY DAVID DAYEN, The New Republic, February 16, 2013

Housing analysts have been giddy for the past year about the comeback of their industry, whose collapse led to the Great Recession. Sure, 2012 was actually the third-worst year for housing ever—but it still beat 2010 and 2011. New and existing home sales, housing starts, and prices jumped in 2012, and experts expect an even stronger recovery for 2013.

It’s clear why people are so excited: Housing typically leads economic recoveries. As more people build equity in their homes, they feel more free to spend disposable income and increase economic activity, a phenomenon known as the “wealth effect.”  So a bullish outlook for housing would seemingly augur a long-awaited recovery to Main Street. But the more you look into it, the clearer it becomes that it’s not being driven by the typical American families who lost their homes in the economic crash. In fact, it’s being fueled by the banks and hedge funds whose speculation caused that crash in the first place.

If you’ve signed a lease in the past year, there’s a good chance your landlord wears a tailored suit and works on Wall Street. One of the hottest trends in the financial sector is known as “REO-to-rental.” Over the past couple years, hedge funds, private equity firms and the biggest banks have raised massive amounts of capital to buy distressed or foreclosed single-family homes, often in bulk, at bargain prices. Their strategy is to convert them to rental units for a while before reselling them when prices appreciate. The Wall Street firms are scooping up properties in the hardest-hit areas, promising high returns for the rental revenue streams—up to 10 percent annually —and starting bidding wars that have driven up some prices well above national averages. It’s the next Wall Street gold rush, with all the warning signs of a renewed speculative bubble.

Enjoy the Open Houses you’ll be making offers on but not buying because some sovereign wealth fund is outbidding you.

Here’s some news from the Merc (motto: Also available on paper!) that won’t come as a surprise to anyone who studied economics.

Bay Area rents are flattening out, new study says

By Pete Carey, San Jose Mercury News
Posted:   01/21/2013 05:47:55 PM PST; Updated:   01/22/2013 05:25:31 AM PST

The torrid pace of rent increases in the Bay Area is slowing, according to a survey of apartment complexes released Monday.

Average rents in the East Bay, Peninsula and San Francisco were nearly unchanged in the fourth quarter of last year and declined slightly in the South Bay, according to RealFacts, a Novato consulting group that tracks rents in apartment complexes with 50 or more units. That compares with the first half of the year, when some areas saw quarterly increases of 4 percent.

Some renters may be deciding that interest rates and low prices have made the time right to buy a condo, and that may account for some of the leveling off of rents, a RealFacts representative said. Occupancy rates for apartments have flattened out while condo sales were in the double digits in December from a year earlier in Alameda, Contra Costa, Santa Clara and San Mateo counties.

This is supply and demand.  If people are buying houses, then they don’t need apartments.  If people are buying houses, they don’t need to rent them, either.  So who loses in a hot housing market?  The landlord.

Are you noticing rents flattening, or even going down? Are more people moving because they bought something, or do new renters spring up instantly to replace them?  Are your rental properties still generating long lines and people offering to fight each other for the right to write you checks?

We’ve just been alerted that we’ve been neglecting Mountain View property, which we are contractually required to discuss every ten minutes.  And it’s been ten whole days! Fortunately, Burbed reader Michael Boltonestater sent us this beaut, which we promptly misplaced during the Black Friday Sales.  Consider this a “we found it in the back of the storeroom” slightly mussed listing. It’s both pending… and selling shortly!    

492 N WHISMAN Rd
Mountain View, CA 94043
$750,000

4 Beds 
2 Baths 
1,748 Sq. Ft.
$429 / Sq. Ft.
Built: 1965 
Lot Size: 0.25 Acres 
On Redfin: 33 days
Status: Pending With Release
Stories: 1
Community: Whisman
MLS#: 81241148
View: Neighborhood
County: Santa Clara

Short Sale! Charming two unit property located in Whisman Area of Mountain View. Huff Elementary, Crittenden Middle and Mt View High. Live in one, rent the other or great investment opportunity! HUGE 10,890 sf corner Lot. R-2 zoning provides multiple use scenarios. Both units are 2 bed /1 bath w/ laundry, garage AND carport. Please DO NOT Disturb Occupants!

It’s a great investment opportunity!  That’s because the current owners are passing the savings along to you rather than the bank.  Yes, savings.  If you had bought this property in 2006, like these investors did, the RBA would have done its magic and increased it by more than half its value in just six years.  And if you were smart and leveraged yourself with a 20% down, 10% down, 5% down, or even ZERO DOWN, then your investment returns would be much, much higher! 

Let’s calculate them, shall we?

So a little over a million dollars, put down 20%, looks like that investment… is now going to be someone else’s instant equity. So, bets on the over/under compared to 2003′s sale price?  Now that provides multiple use scenarios.

It’s been far too long since we’ve checked in with East Palo Alto.  Today’s featured home, courtesy of Burbed reader Petsmart Groomer, shows that you can have luxury at an affordable price.  Remember, if you’re choosing from luxe, low, large, and location, you can usually have two.  Let’s have a look at today’s low and large!

919 RUNNYMEDE St
East Palo Alto, CA 94303
$750,000

6 Beds 
4 Baths 
3,036 Sq. Ft.
$247 / Sq. Ft.
Built: 2010 
Lot Size: 6,733 Sq. Ft. 
On Redfin: 127 days
Status: Active
Property Type: Detached Single Family
Community: East of U.S. 101
MLS#: 81228693
Stories: 2
County: San Mateo

2Homes!!2years new luxury 2 story homes * 3,000plus living space * Main unit4bed/2.5bath 2nd unit 2bed/1.5bath which is rented for $1,600 * Vaulted ceiling * This stunning property boasts a bright & open floor plan that is easy for entertaining * Gourmet kitchen with granite counter tops and stainless steel appliances * 3 car garage, Patio * 1st floor master bed W/ walking closet *

When PG sent this in, the house was simply noted as “East Palo Alto wonder.”  As, we wonder why anyone would build a house in East Palo Alto to this level of finish.  Let alone two houses. 

Then we realized that the builder either took too long to catch the last bubble, or is positioning to catch the next one.  And isn’t $750K a reasonable price to pay for 2 houses in an up-and-coming neighborhood (that is, if by up-and-coming, we really mean “last up, first down”?)  Good thing the agent is pinching pennies by not wasting them on extra spaces in the listing copy.

Also, check out how well these luxe lodgings fit in with the neighborhood!

Let the gentrification begin!  Again!

Now that this silly, inconsequential, election is over, we can focus on what we do best here in the Bay Area – increase housing prices. I’m so glad the election is over because now everyone can stop spending on campaigns, and spend more on buying homes. Or paying more in rent.

Recently, I read this piece and… well… frankly I was infuriated:

San Francisco Rental Market Drives Applicants to Extremes

by Sam Harnett | October 23, 2012 — 7:57 AM

San Francisco’s rental market usually cools down in the fall, but not this year. The average asking price for a one-bedroom in the city is now $2,673 a month, up more than 10 percent from last year. This big rent increase reflects a housing shortage fueled on one side by the recent wave of tech hires and the other by an absence of new units. In response, apartment hunting has returned to the frenzy of the dot-com boom, with prospective applicants packing open houses, forking over application fees and even engaging in bidding wars just to secure a temporary place to live.

I experienced this superheated market firsthand. My girlfriend and I spent three months this summer searching for an apartment. We saw over two dozen one-bedrooms, most for more than $2,200 a month, and almost all of them completely horrible. We’re talking shag carpet, mold, and converted garages with no windows. Even the worst places we saw drew crowds. The open houses were like some twisted beauty contest where you had five minutes to tell your entire life story, woo the landlord, and leave everyone else in the dust. Emil Meek puts it perfectly: the process “turns you into a monster.”

I met Meek and his girlfriend Alma Freeman outside of a packed open house in Potrero Hill. They are in their mid-30s and both have that stretched-out look of put-on smiles and constant heartbreak. Meek is a landscaper and Freeman works for a non-profit downtown. They have great credit and collectively earn $110,000 a year, but they still can’t find a place. Freeman says “it feels a little bit like you are looking on the sidelines and not really able to compete.” The desperation of the search has made them manic. They are arriving to open houses as much as an hour early, peeking into the windows to try and scope the place out, and doing everything in their power to get their application in before anyone else.

Even more worrisome Meek says, is how the process corrupts everyone involved. At one place they saw, the landlord was running a bidding war like it was some kind of game show. The couple had actually met the same landlord a week earlier at a different apartment, and there he had said he was looking to fill the vacancy with “just the right person.” At the second place, the “right person” had come to mean whoever was willing to pay the most money. He looked around at all the applicants and then said “sorry, it’s San Francisco!” As disgusted as the couple was, it didn’t stop them from putting down a bid of their own.

[snip]

Good grief.

1. These people should be pouring their money into mortgages and driving up prices, instead of being selfish, non-citizens and renting. Sheesh.

2. These landlords are such novices. Really? Only judging people by their incomes. You can do better than that! Let’s look at how professionals do it. Time for a flash from the past:

Home Front: Sellers can be choosers

June 17, 2005 12:00 am

By Amir Efrati / The Wall Street Journal

Within a month of putting her two-bedroom house in San Francisco on the market recently, homeowner Linda Gao had five offers, each one above her asking price of $699,000. So before accepting the most-attractive bid, she threw in an extra condition: If you want to buy my house, you have to feed the squirrels.

Two weeks later, she and the buyer hammered out a contract that included feeding the backyard wildlife, which Ms. Gao has done three times a week for the past two years. "I don’t think it matters if it’s a buyer’s market or a seller’s market," Ms. Gao says. "Anyone with a good heart would feed them."

In this booming real-estate market, prospective home buyers are encountering some unorthodox requests. As sellers are barraged by eager bidders, they’re seeking not only the highest price or wrangling over who’ll pick up taxes and closing costs — but some also are asking to stay in the house months after the deal closes, or requesting fixtures that typically stay with the property, such as refrigerators and diving boards. In Tempe, Ariz., one seller invited bidders to sit for interviews until he found one he thought his neighbors would like. A homeowner in San Antonio was happy to let her house go, but only to a buyer who promised not to renovate it.

"As a buyer you have no leverage in this market," says Bruce Ross Bernor, an agent in San Francisco. "You have to bite your tongue and go along with it."

[snip]

Some buyers aren’t eager to give ground. After Lisa Lai Fook offered the $499,000 asking price for a town house in Oakland, Calif., last month, the seller asked her to write a letter describing her background. Ms. Lai Fook walked away. "I’m really busy," says the 33-year-old chemical engineer. "To sit there and write a letter to someone I don’t know after I’ve put down a ridiculous sum of money is insulting."

Let’s face it… if you’re a property owner (a good person), if you’re not being demeaning and cruel to non-property owners, you’re not doing your job in helping those people understand their place in society.

Landlords! It’s time to turn up the heat! Demand that free cuddling be part of the lease! Demand that the renters feed the neighborhood capybara. Don’t have a capybara? Get one so that they have to feed it! Ask them to take a Meyers-Briggs test – but then throw it away just to make them understand you wanted them to waste their time.

Do it for the good of the Bay Area!

If you were a landlord, what would you do to renters?

It’s that time of year, where we watch a couple of politicians make a series of speeches talking past each other, trying to convince you to vote against the other guy. In honor of last night’s Presidential debate, we have two homes for your consideration.  Let us know which one you think is the “winner.”

Wearing the green trim, this house from the powerhouse of Palo Alto is either rolling out the red carpet or sticking its tongue out at you.  It confidently flies the Redfin flag.

253 ADDISON Ave
Palo Alto, CA 94301
$889,000

2 Beds 
1 Baths 
1,164 Sq. Ft.
$764 / Sq. Ft.
Built: 1933 
Lot Size: 6,272 Sq. Ft. 
On Redfin: 147 days
Property Type: Detached Single Family
Stories: 1
Community: Downtown
MLS#: 81217474
Style: Cottage/Bungalow
View: Neighborhood
County: Santa Clara

TFT. Leasehold. $100,000 Reduction. Charming 2 Cottages on Beautiful Roses Garden. Walk to Downtown Palo Alto. Hardwood Floor. Double Paned Windows. French Doors in Living Room Open to Dinning Room. Sun Room with Custom Built-In Bench. Remodeled Kit & Bath with Stone Slab Counters. Fruit Trees. Mo/Mo Rental for Back Cottage. Leased Land w/ 54+yrs left. Downtown Living at a DISCOUNT!Better Alternative than Condo.

And built like a brick… um, chimney, this entry in hot, hot, HOT Mountain View won’t pull out of the debate just because the agent pullled its listing.  We found photos on Zillow, so all is fair.  And it also welcomes you to the debate, giving you two different welcome walkways!

60 Starr Way
Mountain View, CA 94040
Not for Sale

Zestimate $905,916
Rent Zestimate $2,581/mo

Beds: 2
Baths: 1
Sqft: 1,049
Lot: 6,875 sq ft / 0.16 acres
Type: Single Family
Year built: 1949
Construction quality: 6.0
County: Santa Clara
Garage sqft: 360 
Last remodel year: 1949 
Legal description: TRACT 261 BROOKDALE BOOK 13 PAGE1 10 PAGE2 11 LOT 51
Lot depth: 125 
Lot width: 55 
Parcel #: 18904021 
Per floor sqft: 1,049 
Total rooms: 4 
# Stories: 1 
Structure type: Other 
Unit cnt: 1 
Zillow Home ID: 19529422 

Developers Dream! This 2 bedroom 1 bath, home sits on a6,800sqft lot with plenty of potential. Located in a prime location of MountainView with nearby shopping on Castro Street. Looking for a fixer upper Location,Location, Location! Bring your hammer, nails and imagination!

Starr starts out with a trash bin.  That’s going to be tough for Addison to counter with just a rented cottage in the back “yard.”

But wait, Addison’s on leased land!  Try finding any of that in Mountain View! Even Google hasn’t dared that trick to sneak employee housing by the City Council!

What’s Starr going to do now?  Oh, oh, speaking of Google, it’s reaching for teh interwebz, and… here’s the Redfin page!

That one’s going to leave a mark.  Streetview trashbins, plus it’s not for sale at any price. And when it was for sale, the asking price was $800,000.  That means $762 a square foot, or essentially the same as Addison.

And the winner is… which listing copy interrupted more?

British publication Financial Times visits Cupertino and discovers Silicon Valley startups and salons… in a very expensive frat house.

Over the rainbow

Communal living is back in vogue, especially among Silicon Valley’s young technology workers

By April Dembosky, June 29, 2012 6:52 pm

At first glance Rainbow Mansion appears to blend in seamlessly alongside its high-end Silicon Valley neighbours, nestled among the eucalyptus trees and driveway gates of Cupertino, about an hour south of San Francisco. The salmon stucco stretches around multiple bedrooms, balconies and turrets. In the front yard, a stone footbridge arches over a bubbling koi pond.

Inside, it looks more like a university dorm. Bean bags and mismatched couches sit at odd angles in the living room. A former dining nook, now christened “the mystery room”, is lined with hippie-style Indian tapestries on the walls and mattresses on the floor.

Seven people live here, from the ivy league of Silicon Valley companies, such as Apple, Google and Tesla. They are from America, the UK, Serbia and Moldova. While none are blood related, they call each other family.

“We’re not a frat house,” says Mike Grace, 26, a lab manager and researcher at Nasa. “We’re an intentional community.”

Excuse us.  A very expensive intentional community.  As in $7300 a month expensive.  Let’s see what they get for $7300, besides the built-in tech networking with their housemates.

21677 Rainbow Dr
Cupertino, CA 95014

Zestimate $2,509,411
Rent Zestimate $7,435/mo
Est. Mortgage $8,923/mo

Beds: 6
Baths: 4.5
Sqft: 5,127
Lot: 55,321 sq ft / 1.27 acres
Type: Single Family
Year built: 1992

Description from Zillow: This 5127 square foot single family home has 6 bedrooms and 4.5 bathrooms. It is located at 21677 Rainbow Dr Cupertino, California. The nearest schools are Regnart Elementary School, Kennedy Middle School and Monta Vista High School.

Wow, that rent Zestimate’s pretty bang on. Think Zillow’s model includes searching the Financial Times?

Incidentally, the people renting the house have set up a website.  Note the third item on the ribbon: Press.  Several pieces have been written about this house, the sort of people who end up living here, and one the the successes launched from this very library.

Ever hear of OpenStack?  If you haven’t, Wired is happy to fix that, with its history of how it got started.  Yes, here at the Rainbow Mansion.  Oh yeah, and at NASA Ames.

NASA’s Chris Kemp decided that they needed scalable storage of their own rather than through their corporate partners.  Think Google Moon and Google Mars.  NASA has plenty of high-res space images, and they wanted to host them, but that meant they needed a new infrastructure.  And in bringing that project about, they not only crashed upon political shoals (a Congressional “inquiry”) but on the difficulty in creating open-source software when so many potential partners had commercial intents.  And eventually the project led to OpenStack… and several related cloud computing companies.

The founders of the group home explained that they started the house because Silicon Valley rents were high, so sharing a house was much less expensive.  Most of them were new NASA PhDs who came from elsewhere and knew each other through their academic connections.

People would leave, and new housemates needed to be brought in.  The residents are looking for people who want to change the world.

“Group living situations are not tremendously rare in the Bay Area,” he explains. “We have an unusually high percentage of rentals in part of because home buying is so tremendously expensive, and the leverage goes up as you get more people.

“What’s unusual is when you have a really intentional community, when you have a group of people who are determined to build something and really bring people together.”

Everyone loves a flip!  That is if by everyone we actually mean Burbed readers who enjoy realty fail that happens to someone else.  Thanks very much to Burbed reader Michael Boltonestater for this awesome apartment arrangement!

2033 LATHAM St
Mountain View, CA 94040
$5,900,000

— Beds 
— Baths 
13,530 Sq. Ft.
$436 / Sq. Ft.
Built: 1958 
Lot Size: 0.59 Acres 
On Redfin: 20 days
Stories: 2
County: Santa Clara
Community: San Antonio
MLS#: 81230709

Quality 26 Unit Apartment Complex in desirable Mountain View location. Unit Mix of (4) 2 bedroom 1 bath units and (22) 1 bedroom 1 bath units. Property has been very well maintained and has been significantly renovated by its current owner during 2011 & 2012. Attractive curb appeal, apartments open out to a beautifully landscaped central courtyard w/ deck and BBQ. Ext. painted 2011. 25 Apts have DW

If a single family residence flip is good, then this is 26 times better!  Especially because the seller isn’t going to bore you with a bunch of pictures of the interior, when you have no intention of ever living there.

The photo on the right is the only one that matters.  Flip on, Garth!

Looks like the SF Chronicle just discovered that the rental market is as hot in the Valley as it is in The City.  Use this open thread to mock their amazing discovery.

Peninsula rents going the way of SF and Manhattan

San Francisco and Manhattan are famously unaffordable cities to rent in– not that such information discourages people from renting in either location. High demand, of course, is part of the sky high prices.

But according to a new study by Apartment List.com, Peninsula rents are quickly  rising to rival those of San Francisco proper.  Over both 12-month and 18-month periods in the area as a whole, rents have risen an average of 10% and 18%, respectively. Here’s a run down of their data, showing rent changes for different sized units. (UPDATE: This chart is a corrected version of the previous one that contained incorrect percentage numbers.)

And since this is an Open Thread, you can also comment about what your own experience has been with rentals, or home prices, or any open houses you look at today, or how much money you made shorting Facebook.